The invention relates to a seedling medium and a preparation method thereof, wherein the medium comprises the following components of raw materials: one or more of crop by-products, organic wastes, by-products generated in grass pulping process when preparing materials, and ammonia water. The method comprises the following steps: mixing one or more of the crop by-products, the organic wastes, theby-products of the grass pulping process when preparing the materials, and the ammonia water, and then fermenting to gain the medium, wherein nitrogenous condensate water generated when concentratingblack liquid generated in a neutral ammonium sulfite process is optimally selected as the ammonia water, and optimally, the condensate water with 0.05-0.55% of nitrogen content and at the temperatureof 25-70 DEG C is the best; and by-products generated in preparation department in the neutral ammonium sulfite process are optimally selected as the crop by-products. The method re-uses the waste and waste liquid which are generated in the neutral ammonium sulfite process to turn waste into wealth. The permeability and nutrient content of the medium are respectively superior to that of peat perlite, when the medium is used in the growth test of nursery stock of forest, the nursery stock has obvious grow, and the quantity of the root system can be increased by over 30 percent.